The impact of knowledge transfer on foreign subsidiary performance has been a major focus of research on knowledge management in multinational enterprises (MNEs). By integrating the knowledge-based view and the expatriation literature, this study examines the relationship between a multinational firm's knowledge (i.e. marketing and technological knowledge), its use of expatriates, and the performance of its foreign subsidiaries. We conceptualize that expatriates play a contingent role in facilitating the transfer and redeployment of a parent firm's knowledge to its subsidiary, depending on the location specificity of the organizational knowledge being transferred and the time of transfer. Our analysis of 1660 foreign subsidiaries of Japanese firms over a 15-year period indicates that the number of expatriates relative to the total number of subsidiary employees (1) strengthened the effect of a parent firm's technological knowledge (with low location specificity) on subsidiary performance in the short term, but (2) weakened the impact of the parent firm's marketing knowledge (with high location specificity) on subsidiary performance in the long term. We also found that the expatriates' influence on knowledge transfer eventually disappeared. The implications for knowledge transfer research and the expatriate management literature are discussed. Copyright (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.
Previous research investigating the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) reveals the importance of industry specificity. Drawing on strategic stakeholder theory, we argue that the strategic fit between CSR activities and value chain activities contributes to industry-specific effects in the CSR-CFP relationship. Given the multidimensional nature of CSR, some CSR activities will be more impactful for certain industries than others, because industries differ in value chain activities and salient stakeholders. Specifically, we propose and test a set of hypotheses for two industries positioned on the different ends of the industry spectrum based on their ecological footprint -healthcare and resource extraction. We further examine the industry specificity of the CSR-CFP relationship by exploring external economic conditions (the 2008-2009 recession) as a boundary condition. Our study contributes to the extant literature by demonstrating the role of strategic fit between CSR and value chain activities in explaining the influence of CSR on CFP. Additional testing of this mechanism in times of economic hardship adds a unique aspect to our theoretical and empirical contributions.
We examine the extent to which host country income inequality influences multinational enterprises’ (MNE) expansion strategy for foreign production investment, depending on their specific strategic objectives. Applying a transaction cost framework, we predict that national income inequality has an inverted U-shaped relationship with foreign production investment. As inequality increases, MNEs accrue lower transaction costs arising from interactions with various local actors, leading to higher probability of investment. As income inequality increases further, its effect on location attractiveness will become negative, as its attraction effect is increasingly offset by additional monitoring, bargaining, and security costs owing to the more fractious nature of high inequality societies. In addition, we suggest that the impact of income inequality is contingent on investment objectives: The inverted U-shaped relationship is stronger for efficiency-seeking investment but weaker for market-seeking and competence-enhancing investments. We find substantial support for our hypotheses through an analysis of 27 years (1986-2012) of data on Japanese MNEs’ overseas production entries.
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